Competition Bureau challenges a merger between Canada’s two largest office supply companies

The Competition Bureau took action today to protect businesses and organizations across Canada from paying higher prices for their office products.

The Commissioner filed an application with the Competition Tribunal challenging Staples’ proposed acquisition of its main competitor, Office Depot, which operates in Canada under the name Grand & Toy.

The Bureau’s review found that if the acquisition were to proceed, Staples would account for over 80% of sales of various office products to affected customers in Canada, including supplies such as pens, pencils, highlighters, staples, sticky notes and paper. The review concluded that the acquisition would likely substantially lessen competition in the office products delivery business in Canada.

Affected customers include for-profit and not-for-profit businesses, governments, health care organizations and educational institutions, which collectively purchase more than $500 million in office supplies and paper in Canada each year.

The Bureau coordinated with the United States Federal Trade Commission (FTC) and the European Commission throughout its review.

Today, the FTC also launched a challenge to the proposed transaction to protect competition in its jurisdiction. The Bureau’s long standing relationship with the FTC led to an efficient and coordinated review of this matter, consistent with the agencies’ agreement on best practices on cooperation in cross-border merger investigations. The Bureau’s cooperation with the FTC culminated in the filing of simultaneous challenges to protect competition on both sides of the Canada-US border.

The Bureau’s application will be available shortly on the Competition Tribunal’s website.

Quick facts

Staples proposes to acquire its main competitor, Office Depot, which operates in Canada under the name Grand & Toy.

Mergers in Canada are subject to review by the Bureau to ensure they do not result in a substantial lessening or prevention of competition.

Staples and Office Depot are the two largest competitors in Canada in the office products delivery business.

“Our review concluded that Staples’ acquisition of Office Depot would significantly harm competition in the office products delivery business in Canada. In the absence of a viable and effective remedy offer, we are seeking to block the merger to protect competition for Canadian businesses and organizations. The review of this global merger demonstrates how we can work closely with our international counterparts to ensure that competition in Canada is protected,” said John Pecman, Commissioner of Competition

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Source: Global News

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